Question

Specific Identification, FIFO, LIFO, and Weighted-Average

Swing Company's beginning inventory and purchases during the fiscal year ended September 30, 20-2, were as follows:

		Units	Unit Price	Total Cost
October 1, 20-1	Beginning inventory	390	$20.5		$7,995
October 18	1st purchase	490	21		10,290
November 25	2nd purchase	220	22		4,840
January 12, 20-2	3rd purchase	300	23.5		7,050
March 17	4th purchase	910	25		22,750
June 2	5th purchase	810	25.5		20,655
August 21	6th purchase	200	26		5,200
September 27	7th purchase	690	27		18,630
		4,010			$97,410

Use the following information for the specific identification method.

There are 1,300 units of inventory on hand on September 30, 20-2. Of these 1,300 units:

100 are from October 18, 20-1	1st purchase
200 are from January 12, 20-2	3rd purchase
100 are from March 17	4th purchase
400 are from June 2	5th purchase
200 are from August 21	6th purchase
300 are from September 27	7th purchase

Required:

Calculate the total amount to be assigned to cost of goods sold for the fiscal year ended September 30, 20-2, and ending inventory on September 30, 20-2, under each of the following periodic inventory methods. For the weighted-average method, round the average unit cost to two decimal places. Round all final answers to the nearest dollar.

	Cost of Goods Sold	Cost of Ending Inventory
1. FIFO	$	$
2. LIFO	$	$
3. Weighted-average	$	$
4. Specific identification	$	$

Answer 1

Specific Identification Inventory Method
	COST OF GOODS SOLD			COST OF ENDING INVENTORY
	Units	Unit Price	Total	Units	Unit Price	Total
Beginning inventory	390	$20.50	$7,995	0	$20.50	$0
1st purchase	390	21.00	$8,190	100	21.00	$2,100
2nd purchase	220	22.00	$4,840	0	22.00	$0
3rd purchase	100	23.50	$2,350	200	23.50	$4,700
4th purchase	810	25.00	$20,250	100	25.00	$2,500
5th purchase	410	25.50	$10,455	400	25.50	$10,200
6th purchase	0	26.00	$0	200	26.00	$5,200
7th purchase	390	27.00	$10,530	300	27.00	$8,100
Total	2710		$64,610	1300		$32,800
Alternative calculation if given	Cost of goods available for sale		$97,410	Cost of goods available for sale		$97,410
goods available for sale and cost	Less cost of ending inventory		-32,800	Less cost of goods sold		-64,610
of goods sold or ending inventory.	Cost of goods sold		$64,610	Cost of ending inventory		$32,800
FIFO Inventory Method
	COST OF GOODS SOLD			COST OF ENDING INVENTORY
	Units	Unit Price	Total	Units	Unit Price	Total
Beginning inventory	390	$20.50	$7,995	0	$20.50	$0
1st purchase	490	21.00	$10,290	0	21.00	$0
2nd purchase	220	22.00	$4,840	0	22.00	$0
3rd purchase	300	23.50	$7,050	0	23.50	$0
4th purchase	910	25.00	$22,750	0	25.00	$0
5th purchase	400	25.50	$10,200	410	25.50	$10,455
6th purchase	0	26.00	$0	200	26.00	$5,200
7th purchase	0	27.00	$0	690	27.00	$18,630
Total	2710		$63,125	1300		$34,285
Alternative calculation if given	Cost of goods available for sale		$97,410	Cost of goods available for sale		$97,410
goods available for sale and cost	Less cost of ending inventory		-34,285	Less cost of goods sold		-63,125
of goods sold or ending inventory.	Cost of goods sold		$63,125	Cost of ending inventory		$34,285
LIFO Inventory Method
	COST OF GOODS SOLD			COST OF ENDING INVENTORY
	Units	Unit Price	Total	Units	Unit Price	Total
Beginning inventory	0	$20.50	$0	390	$20.50	$7,995
1st purchase	0	21.00	$0	490	21.00	$10,290
2nd purchase	0	22.00	$0	220	22.00	$4,840
3rd purchase	100	23.50	$2,350	200	23.50	$4,700
4th purchase	910	25.00	$22,750	0	25.00	$0
5th purchase	810	25.50	$20,655	0	25.50	$0
6th purchase	200	26.00	$5,200	0	26.00	$0
7th purchase	690	27.00	$18,630	0	27.00	$0
Total	2710		$69,585	1300		$27,825
Alternative calculation if given	Cost of goods available for sale		$97,410	Cost of goods available for sale		$97,410
goods available for sale and cost	Less cost of ending inventory		-27,825	Less cost of goods sold		-69,585
of goods sold or ending inventory.	Cost of goods sold		$69,585	Cost of ending inventory		$27,825
Weighted-Average Method
$97,410 (cost of units available for sale) ÷ 4010 (units available for sale) = $24.29 weighted-average cost per unit
The cost of goods sold and the cost of the end-of-period inventory are calculated as follows:
Cost of goods sold =	2710 units @ $24.29 = $ 65,830		rounded to upper 10th
Cost of ending inventory =	1300 units @ $24.29 =     31,580		rounded to upper 10th
Total	4010 units                     =   $97,410
	Cost of Goods Sold	Cost of Ending Inventory
1. FIFO	$                        63,125	$       34,285
2. LIFO	$                        69,585	$       27,825
3. Weighted-average	$                        65,830	$       31,580
4. Specific identification	$                        64,610	$       32,800